ChannelAdvisor
2018 Analyst MeetingApril 19, 2018
Safe Harbor Statement
This presentation contains "forward-looking" statements that are based on our management's beliefs and assumptions and on
information currently available to management. Forward-looking statements include information concerning our possible or
assumed future results of operations, revenue visibility, key metrics, business strategies, financing plans, operating model,
competitive position, industry environment, potential growth opportunities, potential market opportunities and the effects of
competition.
Forward-looking statements include all statements that are not historical facts and, in some cases, can be identified by terms such
as "anticipates,“ "believes," "could,” "seeks," "estimates," "intends," "may," "plans," "potential," "predicts," "projects," "should," "will,"
"would" or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements
represent our management's beliefs and assumptions only as of the date of this presentation. You should read ChannelAdvisor’s
SEC filings, including the Risk Factors set forth therein, completely and with the understanding that our actual future results may be
materially different from what we expect. Except as required by law, we assume no obligation to update these forward-looking
statements publicly, or to update the reasons why actual results could differ materially from those anticipated in the forward-looking
statements, even if new information becomes available in the future. This presentation includes certain non-GAAP financial
measures as defined by SEC rules. We have provided a reconciliation of those measures to the most directly comparable GAAP
measures in our earnings releases available at www.sec.gov and under “SEC Filings” at http://ir.channeladvisor.com.
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Agenda
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Session Speaker Title
Introduction Mark Cook CFO
Welcome David Spitz CEO
Sales Update Paul Forte Chief Revenue Officer
Business Development Paul Colucci VP, Business Development
Global Services Beth Segovia VP, Global Services
Solutions Overview Mark Vandegrift VP, Product Management
Financial Review Mark Cook CFO
Q&A All speakers
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Q1 2018 Preliminary Results1
In $millionsGuidance
Range
Preliminary
Results
Variance at
Midpoint
Revenue $29.4 – 29.8 $31.2 + $1.6
Adjusted
EBITDA
(0.7) – (0.3) 0.8 + $1.3
1See our press release for details and for required disclosures and reconciliations.
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Our Mission
To connect and optimize
the world’s commerce
Our Platform
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Our Market
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Enterprise
Mid-Market
VSB
3%
We estimate 100k+ potential
customers and ~3% current
market share.
Our Evolution
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Revenue & Revenue Growth (thousands)
Adjusted EBITDA(thousands)
2013 – 2017
• 16% Revenue CAGR
• Improved profitability
• Improved cash flow
• But … decelerating revenue growth
Our Evolution
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2013 – 2014
• Significant & expanding losses against backdrop of decelerating revenue growth
• Analysis indicated that small customers drove majority of losses (high churn)
• Concluded that direct sales model yielded poor unit economics with <$15k ARR customers
Revenue & Revenue Growth (thousands)
Adjusted EBITDA(thousands)
Our Evolution
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2015 – 2016
• Rationalized pricing, policies, and sales & marketing investment to better focus on larger customers with better unit economics
• Contraction in bookings due to resulting pipeline contraction
• Improved profitability, but at expense of further decelerating revenue growth
Revenue & Revenue Growth (thousands)
Adjusted EBITDA(thousands)
Our Evolution
13
2017
• Hired new sales leadership & upgraded talent
• Created strategic accounts team
• Created indirect sales team
• Opened new Denver sales office
• Expanded R&D investment
• Hired new services leader
Revenue & Revenue Growth (thousands)
Adjusted EBITDA(thousands)
Our Evolution
14
2017
• S&M changes yielded first increase in bookings since 2014, and best bookings year since 2014
• Quality and average deal size have increased
• Improved sales rep productivity
• Beginning to see contribution from indirect sales efforts
Bookings Growth
Revenue & Revenue Growth (thousands)
Our Evolution
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Revenue & Revenue Growth (thousands)
2018 & Beyond
• We believe our market opportunity is large
• We intend to continue investing in growth
• We also believe we can begin driving margin improvement through gains in sales & marketing efficiency
Bookings Growth
Our Strategy
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Innovation
Go To Market
Culture
• Channel Expansion
• Competitive Optimization
• Operational Efficiency
• Sales & Marketing Efficiency and Growth
• Indirect Sales
• Strategic Partnerships
• Land & Expand, New regions
• Passion for the customer & continuous innovation
• Curiosity & experimentation
• Service & respect for individual
Our Culture of Innovation – Expanding Marketplaces
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A key part of our
strategy is to expand
our customers’ reach
globally.
In the last year we’ve
added 17 new
marketplaces.
Houzz, Walmart
Canada, Bonanza,
and many others
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71
90
107
2015 2016 2017 Today
Our Culture of Innovation – Growing Dropship Network
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Announced
expansion into
drop-ship last
year
In just one year
have integrated
30+ retailers
Natural
complement to
marketplaces for
suppliers and
brands
Our Expanding Partnerships
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Our Culture
• Six-time winner of the Triangle Business
Journal’s Best Places to Work Award
• Three-time winner of the Bronze® Stevie
Award for Sales & Customer Service
• Named #1 Marketplace Management
Provider to the Internet Retailer Top 1000 for
Six Consecutive Years
• 2017 Women in Business Award
Investment Highlights
• Industry-leading, global e-commerce platform
• Trusted by over 2,8001 customers
• $9 billion in annual GMV1
• Broad exposure to e-commerce trends• Amazon and 100+ other marketplaces globally
• Brands shifting to digital in response to retail disruption
• China’s growing domination of e-commerce
• Logistics, a key beneficiary of e-commerce growth
• Emerging trends like voice commerce
• Emerging benefits from strategic partnerships
• Attractive unit economics
• 17+ year culture of innovating in dynamic industry
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1As of 12/31/2017
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What We Did Last Year
Program Overview
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Since We Last Met ...
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• Installed Impact Program globally
• Operating Rhythm, QBR, MEDDICC, pipeline program, deal review
• Created Sales Advisory Council
• Optimized GTM Coverage model and lead flow
• Created Indirect Channel and re-purposed Business Development
• Strengthened Sales Leadership Team
• New Managing Director for EMEA
• New North American Sales Leader
• New Global Business Development Leader
• New Director of Global Sales Operations
• New West/Strategic Sales Leader
• New SDR Director in US
• New China Lead
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2017 Results Summary
YoY Bookings Growth
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First time positive bookings growth in 3+ years ?
Bookings Increasing
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Sales Productivity Improving (Bookings/QBSR)
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2018 Plans and Priorities
2018 Plans and Priorities
• Hired New China Lead
• Hire New Global Enablement Leader
• Continue top-grade initiative
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• Create Enablement Center of Excellence
• Roll-out Global Enablement Plan
• Improve Sales Rep Productivity by 15%
• Execute Sales Advisory Council Initiatives
• Improved Customer Experience
• Sales Enablement
• Plan/execute an indirect sales model
• Execute Phase 2 Pipeline Program
• Plan/Execute 5-year growth plan
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Mission
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Develop and manage a network of strategic
partners that will enhance sales efforts,
grow GMV and accelerate revenue.
Enhance. Grow. Accelerate.
Organization
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Business Development
SalesChannel
Sales/ResellersCorporate
DevelopmentPartner
ManagementCategory
Management
Areas of Focus
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•Access ChannelAdvisor
•ChannelAdvisor Fulfillment Services
•Retail/Dropship Network
Sales Enhancement
•Partner Management
•Category Management
•Cross Border TradeGMV Growth
• Indirect Channel of Resellers
•Rev Share Agreements
•M&A
Revenue
Acceleration
Unique Value Proposition for Partners
WWITH CHANNELADVISOR?
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• Leading SaaS platform for e-commerce
• Over 350 Digital connections, including over 100 global Marketplaces
• Nearly 3,000 global clients
• Online retailers and branded manufacturers
• 150m SKUs at any given time
• $9bn in online sales
• 220m orders
• Global footprint with offices in Americas, EMEA, APAC
Why partner with ChannelAdvisor?
New Marketplaces
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Technology Business Partners: E-Commerce, Logistics & Fulfillment
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A bit about me …
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• Results Driven, Passionate Customer Advocate
• Dual degreed engineer: Industrial, Manufacturing Systems
• 25 years in the IT Industry in PC Hardware & Services • Customer Service
• Global Execution
• Voice of Customer
• Track record for building organizations that deliver high Customer satisfaction
• Develop high performing teams through • Leadership
• Setting a High Bar
• CX Architect
• Account Management
• Technical Support
• Business Transformation
• Sales Operations & Enablement
• Supply Chain
• Sourcing Talent
• Managing Performance
• Coaching & Development
• Disciplined Approach
What I want us to achieve …
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Customer First, Customer for Life
Understand the customer’s business, goals & needs
Understand how ChannelAdvisor fits into that strategy
Deliver to exceed the customer’s expectations
When we enable our customers to exploit the capabilities of ChannelAdvisor to meet their business goals and expectations, removing effort and friction from their experience and doing what’s right for them in every situation, our business will grow.
ChannelAdvisor Global Services
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• E-commerce Expert
& Business Coach
• Feature Education
• Next Best Action
Recommendations
• Initial Platform Setup
• Software Training
• On Demand Projects
for Ad Hoc Needs
• 6 Countries in 4 Languages
• 24/5 Days a Week
• 17 Years Experience
• Stevie Award Winners
SOFTWARE
IMPLEMENTATION
TECHNICAL
SUPPORT
ACCOUNT
MANAGEMENT
• Business Guidance
• Strategy Development
& Execution
• Visibility Enhancement
• Staff Augmentation
MANAGED
SERVICES
Opportunities
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ACCOUNT
MANAGEMENT
TIME TO VALUE
VOICE OF
CUSTOMER
SELF SERVICE
CLIENT SUCCESS
CONSISTENCY
Faster set up to engage marketplaces & kick start client revenue growth
Align roles, goal structure & customer coverage across regions
Enable customers with education and feature adoption
Expand relationships to grow revenue and drive renewal
Leverage customer feedback to continuously improve service delivery
2018 Priorities
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Improve ‘Customer Centricity’
Faster set up and revenue growth focus
Voice of Customer program
Consistent quality standards
Enable Self Service Customers
Education + Account Manager to recommend next best action(s)
Improve platform usability
Feature adoption
Empower Account Management
Develop advisory and sales skills
Strengthen the Organization
Hire new leaders in critical roles
Build a results driven culture
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Reaching Customers is Complex and Competitive
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PAST:The path to purchase was
uncluttered: Manufacturer,
Distributor, Retailer,
Consumer
NOW:The path to purchase is much more
complex; with multiple purchase
points between Manufacturer and
Consumer: Marketplaces, 3PL Direct,
Brand D2C, Distributor Direct,
Retailer, eCommerce, Brand Stores,
and More
ChannelAdvisor Solution Benefits
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Facilitating Collaboration Between Brands and Retailers
Creating Efficient Operations and Smarter Automation
Providing Valuable Analytics
Improving Visibility and Competitiveness
Expanding Shopper Reach
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Expanding Shopper Reach
Expanding Shopper Reach
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Marketplaces Retail Programs
WebstoresAds
Expanding Shopper Reach – Hybrid Model
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Improving Visibility and
Competitiveness
Improving Visibility and Competitiveness - Content
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Improving Visibility and Competitiveness - Pricing
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Improving Visibility and Competitiveness - Pricing
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Improving Visibility and Competitiveness - Advertising
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Improving Visibility and Competitiveness - Advertising
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Creating Efficient Operations
and Smarter Automation
XML CSV
TXT XLS
Creating Efficient Operations & Smarter Automation
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TransformationEnhancement
ValidationSyndication
Creating Efficient Operations & Smarter Automation
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Channel Order
Order Routing
Order Consolidation
Multiple DCs
Drop Ship Automation
Label Printing
Pick Lists
Packing Slips
Barcode Scanning
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Facilitating Collaboration
Between Brands and Retailers
Facilitating Collaboration Between Brands and Retailers
61Copyright 2018 ChannelAdvisor
Wh
ere
to
Bu
y
BUY
ONLINEBUY LOCAL
Shopping list to retailer’s cart
Deep links to online retailers
Locations basedon product carriage
Local retailers with mapping services
Facilitating Collaboration – Buy Online + Buy Local
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Providing Valuable Analytics
Providing Valuable Analytics
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ChannelAdvisor Solutions
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Who is ChannelAdvisor?
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Retail & Manufacturing
customers worldwide
Global transactionsGlobal employees
focused on e-commerce
The Industry's Most Complete Solution to Help Grow Your E-Commerce Business
100+ channels supported worldwide
68
Q1 2018 Preliminary Results1
In $millionsGuidance
Range
Preliminary
Results
Variance at
Midpoint
Revenue $29.4 – 29.8 $31.2 + $1.6
Adjusted
EBITDA
(0.7) – (0.3) 0.8 + $1.3
1See our press release for details and for required disclosures and reconciliations.
2017 Highlights
69
Gross Merchandise Value (GMV)
21% 5 Yr CAGR
70
Annual Revenue
18% 5 Yr CAGR
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Seasonality
1See our press release for details and for required disclosures and reconciliations.
Our seasonality is driven by our variable revenue
Q118 Results are Preliminary1
Variable Revenue
73
1See our press release for details and for required disclosures and reconciliations.
Our seasonality is driven by our variable revenue with Q4 the
strongest due to holiday sales
Q118 Results are Preliminary1
Revenue by Product
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Customer Metrics
Reduction of over 400
Decline of $4.0m
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Customer Metrics
Reduction of over 400
Decline of $4.0m
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Customer Metrics
Reduction of over 400
Decline of $4.0m
+ 180 customers
+ $7.2m
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Customer Metrics
Reduction of over 400
Decline of $4.0m
+ 180 customers
+ $7.2m
Decline of $4.0m
+ $6.0m
+ 80 customers
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Customer Metrics
Reduction of over 400
Decline of $4.0m
Increase of over $16 million from Dec 31, 2014
Increase of ~90 customers from Dec 31, 2014
+ 180 customers
+ $7.2m
+ $6.0m
+ 80 customers
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LTV:CAC Ratio
Began constriction of smaller <$15k
customer
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Investment Highlights
• Industry-leading, global e-commerce platform
• Trusted by over 2,8001 customers
• $9 billion in annual GMV1
• Broad exposure to e-commerce trends• Amazon and 100+ other marketplaces globally
• Brands shifting to digital in response to retail disruption
• China’s growing domination of e-commerce
• Logistics, a key beneficiary of e-commerce growth
• Emerging trends like voice commerce
• Emerging benefits from strategic partnerships
• Attractive unit economics
• 17+ year culture of innovating in dynamic industry
81
1As of 12/31/2017
Key Investment Highlights
82Copyright 2018 ChannelAdvisor | Confidential
2018 & Beyond
• We believe our market opportunity is large
• We intend to continue investing in growth
• We also believe we can begin driving margin improvement through gains in sales & marketing efficiency
Q & A